China-US Strategic Rivalry: Consequences for the Asia-Pacific

Presentation to Jeju Forum Online Panel (with Chung-in Moon, Graham Allison, Yao Yunzhu and Sung-hwan Kim), 24 June 2021

Australia is one of the many countries in the region – like South Korea, Japan and most of the South East Asians – caught squarely in the crossfire of China-US strategic rivalry. It is not a comfortable place to be, and there are few signs that things are going to get any easier any time soon. In this presentation, I want to describe – to the extent one can generalise – how those of us in this position are reacting.

All of us, to varying extents, are caught between two stools. On one side are our economic interests. Throughout the region China is fast overtaking the US both as the major source of investment and as the final market for exports. In country after country, the degree of economic dependence on China is extraordinarily large – in Australia’s case, well over a third of our exports – and the prospects for diversification, except at the margin and over a very long time, is minimal.

On the other side lie our security interests, where the alliance or partnership ties many of us have had with the United States, have long given us reasonable confidence that our territorial integrity would not be put at risk. Opinion in the region is divided on the indispensability of US military might in maintaining a stable peace and security environment overall – mistakes like Vietnam are hard to forget. But certainly for countries like my own – and Japan, South Korea, most nations of South East Asia, and increasingly for India – the case for the US as a stabilizer in the past, and as an important counterweight to a possibly over-reaching China in the future, is unarguable.

The reality is that none of us want to have to choose between China and the US, between our economic and security interests. None of us can afford to have our economy held ransom to a Washington loyalty test, and none of us can afford to have our security held ransom to a Beijing loyalty test. But the question we have to confront, given the intensity of the rivalry between these current and emerging superpowers, is how long can that luxury of non-choice last?

I am not one of those who believe that choice is going to be forced upon us any time soon by outright war between the US and China, the worst-case consequences of their strategic rivalry. Graham Allison, with his Thuycdides story, has made us all think about the risks associated with rising powers confronting established ones, but the bottom line is that we are still talking about risk, not inevitable, inexorable destiny. In the China-US case the risk is not zero – emotion can drive miscalculation, and that will go on being of real concern with Taiwan in particular – but both sides are acutely aware that the horrendous costs of waging modern major-power war would wildly exceed any possible gain for either.

But rivalry taken to extremes can still cause a lot of damage short of war, and it is critically important for all of us – China, the US and those of us caught in the crossfire – that cooler heads prevail on all sides. That doesn’t mean abandoning respective national interests, but it does mean pursuing them in ways that are less likely to be damaging.

For China and the US, the beginning of wisdom here – which at least the Biden administration seems to be showing some signs of embracing – would be for both sides to adopt a multidimensional approach, recognizing that certain areas of disagreement will remain intractable for the foreseeable future, but that collaborative progress is possible on a number of other issues where there is actual or potential common ground.

The most intractable issues – which will require extremely deft and careful diplomatic management (of neither the Trump/Pompeo or Wolf Warrior kind), include the South and East China Seas, US alliances in Asia, Chinese military modernization, and above all Taiwan. Another group of issues – the trade and investment concerns on which China has so far refused to move, including intellectual property and technology transfer, investment rules, and excessive subsidization of state-owned enterprises – remain very difficult, but should not be impossibly intractable if tensions ease on other fronts.

The best prospects for such tension easing, where collaborative cooperation really should be possible if the US adopts a more measured approach and if China responds in kind, are global and regional public goods issues like counter-terrorism, peacekeeping, piracy, international crime and, above all, the three great existential risks to life on this planet as we know it – climate change, pandemics and nuclear war. In all of these areas (including even pandemics, if one thinks of Ebola rather than just Covid) China has in fact already played a more interested, constructive and cooperative role in the UN and elsewhere, than has been generally recognized, and is well aware of the soft power returns in being seen to do more.

As to how other countries in the region – especially those of us, including Australia and South Korea, with enough diplomatic capacity and credibility to rank at least as middle powers – can contribute to minimizing the negative fallout from China-US rivalry, the storyline for me runs in parallel to that which I have proposed for the big two.

We all have our own national interests to protect and advance, and should not become patsies for either Beijing’s or Washington’s. We should fight for our own economic corners by resisting unacceptable coercion or protectionism by either side. We should stand up to China when it overreaches in its external behaviour, including by developing cooperative arrangements like the Quad which clearly signal that intent. And, while avoiding counterproductive stridency, we should not be afraid to call it out when it manifestly offends universal (not just Western) human rights values.

But we should also acknowledge China’s legitimate interests in its own strategic space and having a global policymaking influence commensurate with its new relative strength. And we should make clear to Washington policymakers that there is almost universal perception in the region that their continued use of the ‘p’ words – primacy, predominance, pre-eminence – in an international environment where its unipolar moment is clearly over, helps relationships neither with adversaries nor allies.

Above all, all of us in the region should work hard – harder than we have so far – to identify issues where there is real potential for finding common ground, those transnational public goods issues which Kofi Annan used to describe as ‘problems without passports’. This is an area in particular in which middle powers have, through creative and energetic coalition-building, often made a difference in the past, both globally and regionally, and can again.

The overwhelming sentiment in the region is to not see the US-China relationship as a zero-sum game. No state wants to be forced into win-lose choices, and avoiding those choices themselves – or forcing others to make them – should be the guiding principle for both Beijing and Washington. If we want a safer, saner and more prosperous world, the future lies not in not ever more stridently confrontational nationalism, but in cooperative and collaborative internationalism.

Gareth Evans is Chair of the Asia-Pacific Leadership Network on Nuclear Non-Proliferation and Disarmament. He was Australia’s Foreign Minister 1988-96, President of the International Crisis Group 2000-09 and Chancellor of the Australian National University 2010-19.

The video version of the presentation can be found here.